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Driven by digital with the best of traditional – the new/old model shaking up the business landscape

Start-up bank Atom – the UK’s only mobile-first bank –  is now one step away from officially disrupting the British banking industry after receiving its full licence from the Bank of England last week. It is an approach that is more clever and well-timed rather than disruptive or revolutionary, as Atom Bank has certainly geared its launch around ideal market conditions.

The plan is to target anyone who is “technically literate”, with not just a sleek app but “innovative products and pricing”. Atom is not just feeding off, but strategically planning to thrive off, the seemingly unstoppable trend of UK high street bank closuresBritish Bankers Association report that we are now checking our bank balance on our mobiles more than anywhere else. More than eight million people downloaded banking apps in the past year, while in a typical week, Brits are transferring £2.9bn through apps, according to the BBA.

And no matter how hard they try, the stalwarts of the banking world are struggling to be the physicians that heal themselves. HSBC’s remedy is to rebrand its UK high street presence with a more parochial feel – yet it will take more than a rebrand to recover from the shedding of 8,000 UK jobs.

Last year, Lloyds cut 9,000 jobs and 200 branches – but launched new digital services such as videoconferencing. Lloyds’ message seems to be that digital is the softener to the blow, adding further intensity to the breath of fresh air Atom is blowing into the archaic UK banking sector.

Some may argue that Atom going after the “tech-literate” still leaves those that don’t fall into this category needing a high street solution, but today, being tech-savvy is no longer the demographic domain of Millennials or Gen Z. Tablet take up amongst the over 55s, for example, has more than tripled since 2013. Thanks to trends like this, brands across the spectrum have had to reconsider how they market to generations that were previously considered older, but not anymore.

These favourable market conditions have created a perfect storm for Atom Bank, but will there be substance behind the sleekness to make it a long-term solution and part of the fibre of our lives the way traditional banks have been? Well, the newcomer certainly doesn’t seem to be resting on the tech savvy laurel of the app alone, declaring that it also aims to be number one in the UK for customer service and satisfaction. If it manages to achieve this, there will be little left for high street banks to compete on.

For in this declaration lies the key to Atom’s non-revolutionary revolution – the rebirth of the institution. Atom and its app-first approach might be new, but what isn’t is a common recognition that tech alone will not save the day and that some of the charm of impeccable customer service is essential – a perfect mix of the old and new, putting the best of the institution at the heart of the revolution.

Atom is not alone in identifying this ‘more than the sum of their parts’ pairing. In the real estate industry, digital upstarts like Purplebricks and have recognised where it’s important to keep some of the old school flavour. Before handing control of your property sale over to you, Purplebricks offers an initial consultation with a ‘dedicated local expert’ whereas eMoov likes to call it a ‘qualified assessor’. They are digitally oriented, with just enough of a hint of personal to pave the way for success.

We will have to wait and see whether the online-only banking industry and its real estate counterparts will attract the same mass consumer uptake for our increasingly time poor society as its predecessors in retail and travel have. Brave names like Ebay, Amazon, Airbnb, Asos and others spotted where an industry was broken and came in to fix it before the industry itself even knew of its own shortcomings – coupling the power of digital with the cornerstone of customer service.

Digital only may not be a business model that will suit all, but what it does offer is wider choice, a new way of thinking and just a touch of what works from the generation before it. They may not be completely reinventing the wheel, but they’re doing their bit to fix what’s broken. Most importantly, though, they are creating a smaller gap between success and failure, between those who innovate and those who don’t.

What industry do you think will be next to see a digital only revolution? What other ‘old school charms’ do you think are essential within disruptive business models?

Image Source: Money Summit

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